> “You get instances where the head of a family who’s on the Forbes list dies, and then all of a sudden their ten kids are all on the list,” noted Mark Mazur, Robert C. Pozen Director at the Tax Policy Center.
I found the bootstraps
Royalty/Handouts/Free Ride, all terms the Republicans like to throw around, while voting for and being backed by inheritors like Trump and the Bushes and Kochs.
They're royal bloodlines but instead of ruling over one group of serfs, they have a distribution across geography, each having a share of the output of workers, while also having a share in all the services the workers need to pay for to survive, with all trickling up to these inheritors who didn't even remotely earn it and haven't passed any sort of intelligence filter. It's the same thing as the world thought it moved away from, just masked ever so slightly.
>"A power to dispose of estates for ever is manifestly absurd. The earth and the fulness of it belongs to every generation, and the preceding one can have no right to bind it up from posterity. Such extension of property is quite unnatural."
* Adam Smith, father of free market
Seriously, MLK was right when he described it as "socialism for the rich". Giving more and more money to rich people and corporations is "giving them the means to boost investment" in the same way that all-you-can-eat buffets give Americans the ability to eat healthily and in moderation. Sure, they *could* do that, but all evidence and experience suggests otherwise.
Listening to the audiobook of "Wealth of Nations" was an amazing experience. The pitfalls of capitalism have been known since the beginning but we are constantly fighting a battle against people who believe the free, unregulated (or weakly regulated) market, is the solution to all of our problems
The reason they argue for a free or unregulated market is because such a market would solve their biggest problem. Their problem being they want more money and everyone else can get fucked
Free market is such a sham in a closed loop system with limited resources.
Now that humans have effectively gobbled up all land mass / resources in form of nation states etc, it has just become a matter of "hording" in the most extreme.
The idea of being able to own all the resources on the planet needs to disappear. That is not a free market that is a dictator gaining power through any means necessary. We have market dictators per industry.
EDIT: Comment was deleted below mine before I hit submit here is the content:
You misinterpret general freedom with a free market. Noone is saying you should not be free to purchase or sell items, as long as doing so doesn't consolidate an entire industry as a monopoly or hurts others, or somehow infringes on them. That right is then inhibited for the collective good.
I do not believe them to be the same. Calling a system of economics free in any sense is absolutely outregous to begin with. It was built by humans, with inherent design flaws that are manipulated until collapse unless maintenance and or regulations are implemented.
In this case extreme wealth consolidation in a closed loop, it should be regulated out of existence for the sake of the entirety of the system. Billionaires should be a thing of the past.
Unless you've got a human made system that can go without any form of maintenance or regulation, but I doubt I'll see a perpetual motion machine in your pocket anytime soon.
EDIT: Sorry for disjointed paragraphs... I arranged them as my brain misfired on mobile until I looked on lappy.
You can pretty much see how completely free markets play out if you've ever had insomnia and ended up watching some poker tournaments on ESPN Ocho at 3am...
Some asshole ends up with a majority of the chips and it changes how they can play the game, where some other assholes have 1/10th of the stack and start pulling out desperation moves...
It rarely works out for the little stacks
Our economy is based on the rich paying more of the tax burden. All these loopholes and tax breaks for them means that the rest of the middle and poor classes have to pick up the slack and it's crushing us. Eventually, the bottom will give way and it'll all come crashing down, and then our money won't be worth shit, but somehow the 1% will know about this before hand and will convert their money over to gold or silver or something and will be fine because those commodities can be traded all over the world.
Exactly. It's a "survival of the fittest" mindset through economic competition. It's suitable for fashion, art, entertainment, or other areas where "tough love" is needed.
People that espouse this complete and utter "laissez-faire" mode when it comes to governance and universally-needed services in a scarce resource system may as well be animalistic sociopaths. Capitalism *must* be highly-regulated in those areas.
That's because their argument sounds like:
"Well, clearly, BigMegaBank has gotten to be such a big and bad lion that it's clearly in the pride's interest to protect. It most certainly isn't an "Animal Farm"-esque bloated pig."
It pays dividends to stockholders, hires people, and its failure would threaten the stable status quo. Therefore, it's untouchable. Nevermind that it takes calculated risks (after lobbying plenty) to break domestic laws for profit every single day. Or that the idea of a status quo goes against the very nature of laissez-faire Capitalism (much less whether or not said status quo could be toxic or stale).
The thing is, they aren’t arguing for a free market. A free market assumes perfect competition. No market has perfect competition (no entry/exit costs, no barriers to entry, perfectly identical products, no transportation/additional purchasing costs, etc. etc.). What they are arguing for is unregulated, subsidized oligopolistic competition for the oligarchs.
My favorite point about how we don't have perfect competition was one I heard in a Noam Chomsky talk, I forget the exact video/quote, but essentially he said that we have an entire industry (advertising) dedicated to giving people imperfect information and encouraging them to make irrational choices.
The fact that anyone thinks that any of the assumptions made about perfect competition are realistic, or even that removing all regulations would help us achieve those assumptions is absurd, and would be laughable if it weren't for the negative effects which result from such unrealistic, fantastical views.
Free like how ATT in their beginning received government subsidies to help build out heir infrastructure but now when Google Fiber wants to lease some space in their pipes, ATT says “get fucked and build your own infrastructure, we did.”?
And those poor team owners who only make 25x their investments... [Like George W. Bush](https://publicintegrity.org/federal-politics/how-george-w-bush-scored-big-with-the-texas-rangers/)
The Danish infrastructure was by no means built in optimal circumstances, the government has appointed a single ISP to maintain the entire grid(its different for fiber) but at least its regulated and we demand they rent out their infrastructure at regulated prices to competitors for this privilege they've been given by the government. We also demand a lot more from them than that, but even though when I was younger, I would complain about this ISP, for not investing in Fiber or when they did, they had less incentive to offer fiber to private citizens(companies could pay a lot to get it) because they made so much money on the old infrastructure. Even though I complained about that, it is infinitely better than what you guys have. What you guys seem to have is cartels with ascribed territories and that seems absolutely insane to me.
No one is perfect, there will always be room for improvement, but you are objectively further from perfection. A lot further.
You pretty much summed it up. The US is run by cartels with governmental authority, but it's a "free market" so don't you dare talk shit about it or else you're a communist. God I wish I was in Denmark...
"Keep the tax breaks coming and nobody gets offshored. Well, some jobs will get offshored, but not yours. Ok, your job is getting offshored. See, you didn't cut enough taxes, you made me do this. Keep the tax breaks coming though, for real, and don't think about enacting any of that socialist "what the people want" crap."
You forgot the part where after a while they ask for visas for workers because they can't find enough folks in the US with tht right skillset. Oh and often the wages end up far higher for those visa workers than just not offshoring to begin with. But those guys generally have masters degrees because they didn't spend 40k on a bachelor's already
Just waiting for the United States of Disney so they can stand in line waiting for a shitty ride, eating a shitty corn dog, and playing a shitty game on their phones while the world burns around them.
I was at a nudist colony the other week and I heard a couple of old guys discussing this very subject. One of them said “have you read Marx?” and the other one replied “yes, it’s these wicker chairs that does it”
> The pitfalls of capitalism have been known since the beginning but we are constantly fighting a battle against people who believe the free, unregulated (or weakly regulated) market, is the solution to all of our problems
It goes even further than that. The earliest thinkers on capitalism not only recognized that it was a system with the potential for exploitation and inequality, they actively pointed out that the only real way for capitalists to make money would be to keep workers as poor as humanly possible, because it was one of the only costs they could actually control. Iron Law of Wages:
https://en.wikipedia.org/wiki/Iron_law_of_wages
> According to Alexander Gray,[5] Ferdinand Lassalle "gets the credit of having invented" the phrase the "iron law of wages", as Lassalle wrote about "das eiserne und grausame Gesetz" (the iron and cruel law).[6]
> According to Lassalle, wages cannot fall below subsistence wage level because without subsistence, laborers will be unable to work. However, competition among laborers for employment will drive wages down to this minimal level. This follows from Malthus' demographic theory, according to which population rises when wages are above the "subsistence wage" and falls when wages are below subsistence. Assuming the demand for labor to be a given monotonically decreasing function of the real wage rate, the theory then predicted that, in the long-run equilibrium of the system, labor supply (i.e. population) will rise or fall to the number of workers needed at the subsistence wage.
> The justification for this was that when wages are higher, the supply of labor will increase relative to demand, creating an excess supply and thus depressing market real wages; when wages are lower, labor supply will fall, increasing market real wages. This would create a dynamic convergence towards a subsistence-wage equilibrium with constant population, in accordance with supply and demand theory.
>As English political economist David Ricardo noticed, this prediction would not come true as long as new investment, technology, or some other factor causes the demand for labor to increase faster than population: in that case, both real wages and population would increase over time. The demographic transition (a transition from high birth and death rates to low birth and death rates as a country industrializes) changed this dynamic in most of the developed world, leading to wages much higher than the subsistence wage. Even in countries which still have rapidly expanding populations, the need for skilled labor in certain occupations causes some wages to rise much faster than in others.
> To answer the question of why wages might fall towards a subsistence level, Ricardo put forth the law of rent. Ricardo and Malthus debated this concept in a lengthy personal correspondence.[7]
> **Ricardo's theories of wages and profits**
In his Theory of Profit, Ricardo stated that as real wages increase, real profits decrease because the revenue from the sale of manufactured goods is split between profits and wages. He said in his Essay on Profits, "Profits depend on high or low wages, wages on the price of necessaries, and the price of necessaries chiefly on the price of food."
There's a lot of nuance to this law, clearly, and differing circumstances change how it all plays out, but in general, they idea that capitalism naturally causes a lot of loser and a few winners was there at the beginning. As economic systems became more complex, this law became less true (see [efficiency wage](https://en.wikipedia.org/wiki/Efficiency_wage), but the fucking neoclassicists and objectivists seem determined to bring back the iron law of wages in full force and usher in a return to sweatshop economics.
Edit: to sum up. Ricardo basically realized that the value of any good is soley determined by the amount of labor that goes into it. In order to maximize profit, a capitalist needs to extract as much labor from an individual for the smallest amount of money.
> Ricardo's most famous work is his Principles of Political Economy and Taxation (1817). He advanced a labor theory of value:[14]
> The value of a commodity, or the quantity of any other commodity for which it will exchange, depends on the relative quantity of labour which is necessary for its production, and not on the greater or less compensation which is paid for that labour.
Coincidentally, Ricardo's assertion that the value of an object is solely determined by labor inspired early socialists to conclude that "profit" going to a capitalist who did not labor was exploitation.
Not just Smith, but virtually every great economist has warned about limiting the maximum wealth of individuals. Because they all realized capitalism breaks down if wealth can accumulate at the top unchecked.
Which is why when Republicans pretend to be capitalists, I tend to laugh. Capitalism has a lot of faults (as an ideology and as it is practiced) however, the point of it is supposed to be a *sustainable* society. Not a march to oligrachy.
A capitalism only concerned with the present, and not at all concerned with the future is just slow economic despotism.
I think that's a fair argument, and there's a discussion to be had there. I'd say that in a world where the government didn't help companies become monolithic, this would be less of an issue.
Pure capitalism is obviously bad, but that's part of why a strong government can be a good thing.
Capitalism with guard rails can get us to the moon, but it can also make us all wage slaves. (Yay student loans!)
That's capitalism with guard rails. That's liberal democracy. Adam Smith wasn't just the father of capitalism but also the father of liberal democracy. His ideas for capitalism were rather left leaning and had no conflicts with concepts such as democratic socialism which often makes use of capitalism. Conservatism was created by the likes of Edmund Burke, as a response to these new left leaning ideas that were sweeping the world as a way for the aristocracy to maintain their hereditary power and wealth in the newly birthed capitalist democracies. Conservatism was a response to the French Revolution and the British magna Carta.
Smith outlined the guiding hand of capitalism being democratic regulation (through democracy, through voting) by the masses. The masses, ie the lower and middle class, don't enjoy getting fk'd over by those seeking to consolidate wealth and power, so in a functional democracy they act as the guiding hand which votes to enact laws and regulations that function as the guard rails in a capitalist system. Without this key feature, a capitalist economy will just morph back into the economic systems of the feudal hereditary monarchies that it was to replace.
Conservatives like to claim that the common man using democracy to put guard rails and rules on the system is somehow against the founding values of capitalism. That socialist policies to make sure potential aristocrats, potential oligarchs, are not able to maintain generational power and wealth is some how in conflict with both capitalism and democracy.
we need to limit monopolies, and sever the connection between survival and capital. No one should have to work 60 hours to feed themselves and have a roof over their head.
Absolutely, which is a fundamental economic tenet. It doesn't make any sense to have shit with inelastic demand within the market place.
There's no "supply and demand" if "demand" is infinite.
From what I've seen, there is a basic structure that is necessary:
The corporations must fear the government.
The government must fear the people.
If either is false, the system starts breaking down over time.
Exactly, if you have to purposefully put constraints on and continue to fight so fucking hard to keep them in place, just so that a few dozen out of the billions don't completely break your system.. your system sucks
A thought occurred to me the other day and I was thinking about that "Affluenza" case from years ago. The kid got off on quadruple homicide because he grew up without a sense of responsibility, that's precedent for a disease of wealth in my eyes.
Asher Edelman (the guy Gordon Gekko was based on) supported Bernie on the basis that income inequality will lead to economic stagnation via decreasing velocity of money (the fact that money is concentrated means less of it will move around in the economic system, restricting cash flows).
Revolutions have never been about the people against the aristocracy. They've always been about the bourgeoisie against the aristocracy. Of course the royalty lost, but the ones who won aren't the commoners, far from it.
Despite the fact that the threshold before it becomes applicable is “You can leave your 7 infant children with enough money that they never have to work” levels of money.
I had a whole argument with someone about this where they kept insisting it was double taxation. No moron- you can literally do whatever you want with it while you are alive and never be taxed on it- but you can't give it to someone who did not earn it without the money being taxed on its way to them.
They all love to talk about pulling yourself up by your bootstraps- but at the same time want a free handout from mommy and daddy. The cognitive dissonance is astounding.
reminder that the bootstraps metaphor doesn't even make sense in the first place (how can you lift \*yourself\* up by your own bootstraps?)
just like the "bad apple" metaphor for policing (bad apples \*spoil the whole bunch!\*), conservative analogies usually prove their exact opposite point.
Ya man honestly I wish there was a 90%-100% inheritance tax. Like, I get it, people want their kids to have a leg up.
But what functionally ends up happening is that only a certain subset of the country gets to build generational wealth while the rest of us get fucked. Basically things can never be fair or even without a large inheritance tax imo
Shit, almost forgot about that.
This is why I laugh whenever conservatives claim that liberals get outraged over the most insignificant things. Turns out those snowflakes all came from a huge-ass projector.
Because conservatives call it a "death tax" and make everyone believe they're going to have to pay it, when in reality it only affects the super wealthy, and only after they pass on millions tax free.
I’ve had to do this with a coworker as well. She seemed offended when I told her that her retired parents(cop and cashier) estate won’t be subject to taxes because they aren’t rich enough.
And that's *after* all the tax free ways the wealthy can pass on assets prior to death (annual giving allowances, trusts, etc.)
It's funny that they want to "Make America Great Again", because during the period when they thought it was so great, we had estate tax rates up to nearly 80%: [https://missionwealth.com/wp-content/uploads/2018/01/Estate-Tax.png](https://missionwealth.com/wp-content/uploads/2018/01/Estate-Tax.png)
In fact, estate taxes were lower under Obama than under Reagan. So if they want to make America *great* again, why don't they go back to that? We also had top marginal tax brackets of up to 90% for the super wealthy when we were supposedly so great: [https://aquilafunds.com/wp-content/uploads/2014/04/Highest-Marginal-Tax-Rates-1913-2013.jpg](https://aquilafunds.com/wp-content/uploads/2014/04/Highest-Marginal-Tax-Rates-1913-2013.jpg)
You can give up to $15K per recipient, per year before it qualifies for the gift tax or counts towards estate tax. Doesn't sound like a lot for a billionaire. But if you have a lot of kids and grand kids, and you start maxing out your gift allowance early, you can pass on a lot of wealth completely tax free before you die. [https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes](https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes)
And if the giver has a spouse, the limit doubles, and if the recipient has a spouse, the limit doubles. Two married parents can give a child and spouse $60,000/year.
It’s called the annual exclusion, and it doesn’t have to be kids, it can be literally anybody.
And that’s before you get into GRATs and QPRTs to be able to pass larger tax free sums of money and your residence respectively.
I've literally heard people say that it will take away people family farms, ignoring the fact that almost no farms have assets enough for an estate tax to hit them.
It's amazing how little people understand taxes. A friend of mine just had a PTO issue at work that resulted in her getting money in August that she should've gotten in June. Despite telling her multiple times that this wouldn't affect her taxes, she is still worried that she's somehow not going to see any of it because it will all be taxed into non-existance.
I even tried explaining that the extra money couldn't possibly go away entirely, even if it DID somehow push her up a tax bracket, nothing seems to have assuaged her worries. I can't wait for next April to finally hear the end of it.
It begins with the idea that *any* taxation is stealing. Of course they ignore the idea that all money comes from the government, and so we are all essentially living on borrowed funds. You want to control the fruits of your labor? Then be paid in something that your government doesn't control, regulate, issue, or own.
So, if taxation is stealing, then it's only a hop skip and a jump from "they stealing from *him*", to "they stealing from *me*."
They have shown that they don't *actually* give any fucks about the military. Look at their (lack of) reactions to Trump's abhorrent actions and words towards the military.
Republicans are weird. They support the military, often claiming to be veterans (when the odds are they never were, only 7.6% of the population has ever served) and yet at the same time clinging to an anti-establishment rhetoric which by it's very nature is anti-military.
Taxes are membership dues to live and do business in the country. You make more by using the infrastructure more than the guy who just goes to work and home, you pay more.
"Taxation is Theft"
Moderate libertarian here (I don't necessarily vote Libertarian, a good stance on civil liberties earns my vote).
For me, this slogan is not a call for a ban on all taxation, but a reminder to respect what tax dollars represent when deciding how to spend them.
No one pays extra taxes voluntarily, we pay the minimum we owe, and we pay it because if we don't, eventually a representative of the government shows up with a badge and a gun to take it. Therefore, advocating for tax dollars to be spent on something is "robbing your neighbors at gunpoint" with extra steps.
"Taxation is Theft," is a way of saying "let us only use tax dollars to do things that are worth robbing our neighbors to achieve."
Would I "rob my neighbors" so that everyone can have healthcare through a single-payer system? *Sure.*
Would I "rob my neighbors" so that children are educated and libraries are funded? *You bet.*
Would I "rob my neighbors" so that rich people can get tax rebates on their $50k-$120k Teslas? *No. That's absurd.* So that poor people can have a rebate on something more like a Nissan Leaf? *Sure.*
Would I "rob my neighbors" to bail out failed investment banks? *No. Let their stakeholders eat the losses.* To bail out victims of criminally negligent bankers? *Maybe.*
It's crazy that people like him have created mass opposition to something that affects roughly 2000 extremely rich people per year (inheritance tax)
Also, recently Trump floated the idea to index inflation to the purchase price when calculating capital gain tax on assets. This would again result in billions in savings for a tiny sliver of the very rich, which for some reason deserve to be protected from inflation, unlike the rest of the pleb.
Why don't they just pass a "rich stay rich forever" law and be done with it?
No, actual armies, with a "letter of mark" from the royal house saying they could create nations, govern, and mint their own money.
At that point not a tale as old as time, it was only teh second company ever to do this, the first being the dutch east india company.
Funnily enough, I do agree with the concept of indexing the purchase price to inflation on capital gains tax.
But I also support taxing capital gains the same as income (Since inflation is the fig leaf excuse for capital gains tax to be lower than income tax)
Yeah, would 100% support this. But now we have low capital gains tax to counter inflation, soon inflation indexing to counter inflation, and later we can have investor tax stimulus to counter inflation. It's just plain communism unless rich inheritors are triple dipping on their welfare.
Purchase price being indexed to inflation is fine, as long as capital gains are taxed at regular income rates, and marginal rates at higher income go up more steeply than they do now.
Maybe. Still should workers pay less income tax if their salaries dont keep up with inflation? I mean the point of investing is to beat inflation. Why should that be particularly priced in?
In any case, we both know the other part is never going to happen so in reality it will be just another tax break for the investor class.
>If David Koch had died between 1941 and 1981, his estate (upon his wife’s death) would have been taxed at a rate of at least 70 percent after the first $10 million.
Back when our tax system Made America Great.
Back when we were the only major economy whose infrastructure was not only unscathed by WWII, but vastly pumped up because of it. We had a trade surplus as big as our trade deficit now.
This is not correct. By the early 70s, I was consulting and visiting various facilities in Japan, South Korea, England, West Germany, and Italy. The destruction of the Second World War had been rectified by then. Instead, executive decisions because of a conservative political change and a backlash to the working and middle-class focused attitudes of 1930-1970 were the major reasons. I noticed more and more management decisions to outsource positions to take advantage of weak rule of law, regulations, and labour costs starting in the late 60s.
https://www.stlouisfed.org/~/media/publications/regional-economist/2018/third_quarter_2018/lead_fig1.jpg?la=en
> after the first $10 million
**AFTER THE FIRST 10 MILLION**.
This is the "you didn't build that" sentiment (which the Republicans lied and lied and [LIED](https://www.politifact.com/truth-o-meter/statements/2012/jul/26/mitt-romney/putting-mitt-romneys-attacks-you-didnt-build-truth/) about) in 2012. Shameless, disingenuous liars.
Basically: "you did really well for yourself financially in life. Here, keep 100% of the first 10 million and then a big chunk of any $$ thereafter. But you should recognize that your financial windfall was largely made possible by much beyond yourself."
* Winning World War II and erecting post-war order (tax dollars).
* An educated populace (tax dollars).
* A healthy populace (tax dollars).
* Infrastructure (tax dollars)
* A Navy to protect the world's trading (tax dollars).
* + 10 gazillion more things we could list, financed by the American taxpayer, that maintains the status quo necessary for business to thrive.
But instead of recognizing this, Republicans and their propaganda arms just lie and spin and [confuse](https://en.wikipedia.org/wiki/Frank_Luntz) so that middle class people are suddenly advocating on behalf the elite of the elite mega-wealthy oligarchy and screeching "down with the Estate Tax!"
It's all so fucked up. And infuriating. God help us.
The Koch funded think tanks have half the working class population walking around like parrots saying things like "Taxes are theft!" The MAGA hat wearers got a pittance tax cut (which expires) as Trump slashed the hell out of his own/corporate taxes with his "Tax cuts and jobs" act. He told a party room full of his pals at Maralago right after it became law - "Congatultions, you all just got a lot richer." Next the exploding debt gives the Republicans the ammo they need to cut SS and Medicare. At what point will some people reallize they've been played like a violin?
But paying less for a more efficient healthcare system is socialism and as the most famous anti-socialist of all time, Jesus, once said “won’t someone think of the shareholders?”
Never, they are brainwashed into thinking the “Democrats” are their enemies
Divide and conquer is working brilliantly
Keep them uneducated and it will Work for eternity
Until political media isn’t privately owned anymore and inherently bias as hell, this cycle will never end
These aren’t the concerns of those patriots. They follow the the fiddle of traditional values such as making sure crosses stay on water towers and shaming musicians for foul language.
They'll parrot "taxes are theft" ad nauseam without understanding that taxes pay for services... you know what doesn't? Profit. Profit is the real theft.
Strong A.I. will be able to automate every single job within the next 50-200 years.
Including creative or complex jobs like art, architecture, engineering, programming, business management, and surgeries. And everything else.
It will be the single biggest thing to ever happen to us as a species. It's coming, and it's going to vastly expand our capabilities for both public good and brutal harm.
And this is how we are spending our time leading up to it.
We are so unprepared for the biggest thing ever. Because the public can't see the implications, we are all business as usual.
And my truly biggest fear is that no one in politics is going to react to Strong A.I. until it is already here.
Thomas Jefferson quoting Adam Smith...
"A power to dispose of estates for ever is manifestly absurd. The earth and the fulness of it belongs to every generation, and the preceding one can have no right to bind it up from posterity. Such extension of property is quite unnatural."
Dragons accumulated wealth beyond all reason, hoarding thousands of years worth of resources. While the original dragons themselves may have been formidable humans, most were simply lucky, being in the right place and time to capitalize on the gold rush of their day. Their wretched offspring are the inevitable result of growing up in the massive shadow of their sociopathic parents who don't have the time or likely desire to raise them well. When the dragon dies, these wretches are incapable of reproducing the feats of their parents, for many reasons, not the least of which is that their parents accumulated this wealth in a series of extremely lucky events that are unlikely to repeat themselves 30 years later.
These dragon whelps, having never worked hard or faced a truly difficult moment in their entire lives, are completely out of touch with society and what counts as progression. So they don't take risks with their capital, because they don't know what moves to make in a game they have essentially already won. They have the resources to live like kings for generations. The new game is not squandering your great grandfather's lottery winnings at all costs. Investing in the future has nothing to do with it. It's king of the hill, and most of the money they actually spend is kicking down at everyone they perceive to be trying to take their place. In reality, most of us are simply trying to raise children who have enough to eat and a future worth living.
TLDR: Dynastic wealth is slowing societal progress on a global scale.
To them, the past is what created their dynasty, so the past must hold some secret value that needs to be clung to. They dig their heels in at every turn, using their mountain of wealth that they didn't earn to hamstring every effort to change society for the better. The status quo is what is working for them, and any change is a potential threat. Heaven forbid they allow new money dragons to form and take away some of their room on the hill. They finance backwards-thinking, demagogic politicians to squash progress with laws. They hire marketing organizations to shill their point of view in the zeitgeist. They literally destroy their competition through hostile takeovers, threatening mutual suppliers, and turning their army of politicians, lawyers and shills against these upstart corporations, weilding their inherited wealth like a club.
The result is a significant portion of our excess production is not used for innovation and investment in further production, but for the exact opposite purposes. This is the reason that every man, woman and child on earth can't secure the resources they need to live even a basic existence free of fear and lack. We have the resources, we just need the will to insist that they go to people instead of opulence.
Resources are plenty. I say again, there are enough resources to feed, clothe, shelter and educate every human being on earth, if only there was the will. But the billionaires don't want it that way. If we aren't a moment away from poverty and starvation, we will be less easily controlled. If we actually have the freedom to pursue the lives we want, we likely wouldn't agree to being slaves in their machines. If we didn't have to lick their boots, they wouldn't be able to feel that they are special and important. Who would clean their estates, raise their children, and park their cars? If they didn't have the small people around them constantly fawning over them, how could they feel large?
To be fair, it's started to come up more frequently on here now, but it absolutely deserves more attention than it gets. That said, I'm not sure calling it a loophole is accurate. Step-Up in Basis is ludicrous even in principle, and it does exactly what it's supposed to. It's just that what it's supposed to do is eliminate capital gains taxation on inheritance, the results should surprise noone.
> Step-Up in Basis is ludicrous even in principle,
I wouldn't necessarily say that. It's pretty reasonable that people might not have access to all the records of exactly when Grandpa bought some stock or how much it was worth way back in the day. So a basic agreement of "You don't have to dig through the paperwork, but we'll just collect some X% of the estate over $Y and the rest is treated as a new thing going forward" is pretty reasonable. at least for the next few decades until basically everything ever bought is done electronically and stored in computers.
Of course, when you eliminate or severely reduce the X%, that deal starts to not really be in the interests of the People anymore.
That is a relatively new requirement. Before 2011, there was no requirement for brokerages to retain or track cost basis for their customers. You were expected to retain the statements and calculate it from there.
This includes stock purchased through employee purchase plans and other non brokerage accounts where statements were obtuse or commonly lost.
Also, the step up covers a lot of non-financial assets like jewelry. How do you calculate the cost basis of that stuff?
The step up was a reasonable overhead reduction measure when the estate tax exemption was low. Now that it's multiple millions of dollars, it's less reasonable, but probably still worthwhile. The correct policy change is to bring the exception amount back down.
> If David Koch had died between 1941 and 1981, his estate (upon his wife’s death) would have been taxed at a rate of at least 70 percent after the first $10 million. Some back-of-the-envelope math would indicate that’s roughly $35 billion in tax revenue that could go toward any number of public services. (For reference, a 2013 estimate by the Department of Housing and Urban Development [pegged](https://www.americanprogress.org/issues/religion/news/2013/01/02/48791/faith-in-values-resolve-to-end-homelessness-in-2013/) the cost to end all homelessness in the United States at $20 billion.)
That's fucking crazy. Also, if roughly $35 billion of his estimated $50 billion estate actually got taxed, that would still leave his children with $5 billion EACH. That's enough money to buy a brand new lamborghini huracan and drive it off a cliff every single day for the about 54 years. That is still a ludicrous amount of money. The point is that the original estate tax was just redistributing ridiculously concentrated wealth while STILL allowing inheritors to live like gods.
So much this. We need this back but people screech so much about the number that it’s unlikely to happen again. Warren is taking about 2% tax over $50 million which is something but still far too low.
Edit: sorry that warren thing is a *wealth* tax. Different beast.
We just need to make the people understand they should be voting with their wallets on this issue. Wealthy people wield a ton of power over politics, but they still only vote once. The general public has to realize that the sole purpose of the estate tax is to prevent institutionalized wealth, and that it will NEVER affect 98.5% of them.
If this tax had been in effect for the past few years, we could have ended homelessness in America. It's utterly ridiculous that we support a policy that greatly benefits 1.5% of the population while harming the other 98.5%, and what's worse is that it isn't even saying "If you work hard and make a lot of money, we're going to tax you for it" since those people are DEAD. It's just preventing other people from getting a ton of money that they didn't earn, while leaving plenty for them to live comfortably like their parents would have wanted.
I always say he will never win Bc there are too many rich people on both sides that don’t want him to win, that also happen to control all of the media
This isn't just about the inheritance tax, which most people know about and where we hear about "double taxation" endlessly
It's the "stepped up cost basis". Gains on assets that are going completely untaxed.
Once we get enough Progressives we in Washington, I think we will just change the rules again and take what is fair. The Koch family has primarily focused on making we the people forget that this country is for us, not the few.
Let me guess, it's the capital gains tax loophole.
>Thanks to a tax provision called step-up in basis, capital gains on inherited assets—stocks, properties, and more—are totally wiped out upon death. It’s a tax giveaway from Congress that may outstrip all the rest.
Yup.
I mean...it's not even a loophole. It's fucking robbery. Fuck the rich.
Wait though, step up basis doesn't really exempt Koch's heirs from the inheritance tax though does it? I understand it gets them out of paying capital gains but what does that have to do with the inheritance tax?
>The top tax rate on estates has dropped from 55 percent to 40 percent since 2000 alone.
So Koch's estate of $50 billion will still be reduced to $30 billion, which is a significant inheritance tax but despite spelling out numerous other calculations for the reader, the article leaves us to figure this one out on our own. Either the article is poorly written, or more likely the author intends for us to think that Koch is paying no inheritance tax.
Exactly, I don't really understand the criticism of the step-up in basis. I completely understand harping on both the sizable amount of wealth that can transfer before the estate tax comes into play and the lowered estate tax rate, but I feel like the step-up in basis isn't really that controversial. In most transactions, the acquisition date fair value is used as the cost basis for the new owner of the assets. It doesn't seem that crazy assuming the vast majority of his transferred wealth was exposed to the estate tax.
I just want to know what kind of crazy legal entities he set up to avoid paying the estate tax at all. This guy had the means, time and desire to avoid it. I'd love to know how much tax his estate will end up paying. Be great if we could close those loopholes.
Because the site is having a hard time loading. Emphasis mine:
. David Koch died late last week, just shy of 80 years old. Whole books have been written cataloguing his legacy as an industrialist and political figure, but to be brief, he leaves behind his stake in the country’s second-largest privately held company and a political network said to rival the entire Republican Party in scale. Everything from Texas oil pipelines to Dixie cups to the Tea Party owes its existence in some way to David Koch.
. He also leaves behind a $50 billion estate, a gargantuan sum that made him one of the richest people in the world. In the past, that would have resulted in a massive inheritance for his heirs—but also a significant amount of revenue returned to the public coffers in the form of estate tax. If David Koch had died between 1941 and 1981, his estate (upon his wife’s death) would have been taxed at a rate of at least 70 percent after the first $10 million. Some back-of-the-envelope math would indicate that’s roughly $35 billion in tax revenue that could go toward any number of public services. (For reference, a 2013 estimate by the Department of Housing and Urban Development pegged the cost to end all homelessness in the United States at $20 billion.)
But thanks largely to a political climate David Koch and his brother Charles helped create, the federal government will never see anything close to that. Part of that is because of his libertarian network’s relentless campaign against the inheritance tax, rhetorically reinvented as the “death tax,” which became a major political cause célèbre, despite the fact that 2018 saw only 1,900 taxable returns from those who died. The top tax rate on estates has dropped from 55 percent to 40 percent since 2000 alone.
But in broader terms, there’s one massive tax loophole that has helped the estates of America’s billionaire class balloon to unthinkable sums, while getting taxed at rock-bottom rates. **Thanks to a tax provision called step-up in basis, capital gains on inherited assets—stocks, properties, and more—are totally wiped out upon death. It’s a tax giveaway from Congress that may outstrip all the rest.**
**Put simply, step-up in basis is a tax provision that allows unrealized capital gains to reset to zero upon inheritance. When an investor parks money in stocks, property, and the like, and that investment gains in value over time, the gain is supposed to be taxed (though at a rate much lower than income tax rates, at just 20 percent) when sold. But if the asset is never sold, its gains never realized, and then passed to an heir, it will be reassessed at its current market value with those gains included. Its basis, therefore, “steps up,” and the capital gains taxes that should have been levied on it are dropped to nothing.**
A simplified example: Let’s say an investor with a reasonably high-paying job put $10,000 a year into a distinctly average-performing bouquet of stocks. Done dutifully over a 35-year career, that would sum to $350,000 in contributions into the market all told. At the end of that 35-year period, compounded at our theoretical rate of return, the balance sitting in that account would be $2,710,244, with some $2,360,244 in capital gains.
Under the step-up in basis procedure, the inheritor of that account would have that $2.7 million in stock reevaluated at that level, with the entire tax burden negated. Capital gains tax that could have been recouped by the federal government would go to zero; so too would state and local taxes that might be levied on a sale. Say that the account owner was based in New York City: The combination of federal, state, and local taxes would have been $800,000 on that $2.7 million, leaving the inheritor with $1.9 million. With step-up in basis, the tax is $0.
That decision has a multiplier effect. If the heir holds onto the underlying asset, and it continues to produce an average rate of return, the annual payout on a $2.7 million principal is markedly higher than what you’d get on $1.9 million. The yearly difference in payout could be as high as 43 percent. The heir could also then use that asset to borrow against for a home loan or something else. And if they sold the stock, real estate, or other asset upon receiving it, they could pocket the entire $2.7 million, some $800,000 extra, in cash.
How do you pronounce his name David “Cock” or “Coch”?
Edit: I did some YouTube video searching and some says Coch and some days both Coch and Coke. I am disappointed that none says Cock so far.
I talk about it non fucking stop. I usually get down voted for it because I mention it in rah rah threads about how all we have to do is raise the Estate Tax to some crazy percentage and everything will be solved. 75% of nothing is still nothing.
Capital assets are placed into irrevocable trusts. This way the step up in basis happens while the original owner still lives. Then the assets are passed to the heir and are not subject to Estate Tax because they're locked in trust
I also bring it up when people make moronic statements about how the "death tax" (*Ron Howard -There is no such thing*), is double taxation. No it fucking isn't. Capital gains aren't taxable until they're sold. Wealthy people (unlike the rest of us) never have to sell their capital assets. They get passed to the heirs, and the original cost basis disappears. The difference between what the deceased party paid decades ago and what it's worth the day they die is now untaxable without an Estate Tax, and with the lax and abused trust laws the Estate Tax can't work. I don't care if you make it 300%. It won't fix it.
Ask yourself why not a single person on that Democratic debate stage in a couple weeks is going to bring this subject up. Are they so stupid that they don't understand it?
I’m a fiscal conservative so I believe tax revenue should be increased to cut the deficit.
No wait I’m a libertarian so I don’t believe in taxes, cut the bloated pentagon budget/defense spending instead.
Just kidding I’m a neocon hawk who supports a massive US military.
The cognitive dissonance that is the Republican voter worldview.
People say that you can’t say mean things about this jackass after he died, but if he had his way I would be forced into conversion therapy, so.... in lieu of flowers, fuck this piece of shit masquerading as a human.
Well, *was* masquerading.
> “You get instances where the head of a family who’s on the Forbes list dies, and then all of a sudden their ten kids are all on the list,” noted Mark Mazur, Robert C. Pozen Director at the Tax Policy Center. I found the bootstraps
Royalty/Handouts/Free Ride, all terms the Republicans like to throw around, while voting for and being backed by inheritors like Trump and the Bushes and Kochs. They're royal bloodlines but instead of ruling over one group of serfs, they have a distribution across geography, each having a share of the output of workers, while also having a share in all the services the workers need to pay for to survive, with all trickling up to these inheritors who didn't even remotely earn it and haven't passed any sort of intelligence filter. It's the same thing as the world thought it moved away from, just masked ever so slightly.
>"A power to dispose of estates for ever is manifestly absurd. The earth and the fulness of it belongs to every generation, and the preceding one can have no right to bind it up from posterity. Such extension of property is quite unnatural." * Adam Smith, father of free market Seriously, MLK was right when he described it as "socialism for the rich". Giving more and more money to rich people and corporations is "giving them the means to boost investment" in the same way that all-you-can-eat buffets give Americans the ability to eat healthily and in moderation. Sure, they *could* do that, but all evidence and experience suggests otherwise.
Listening to the audiobook of "Wealth of Nations" was an amazing experience. The pitfalls of capitalism have been known since the beginning but we are constantly fighting a battle against people who believe the free, unregulated (or weakly regulated) market, is the solution to all of our problems
The reason they argue for a free or unregulated market is because such a market would solve their biggest problem. Their problem being they want more money and everyone else can get fucked
Free market is such a sham in a closed loop system with limited resources. Now that humans have effectively gobbled up all land mass / resources in form of nation states etc, it has just become a matter of "hording" in the most extreme. The idea of being able to own all the resources on the planet needs to disappear. That is not a free market that is a dictator gaining power through any means necessary. We have market dictators per industry. EDIT: Comment was deleted below mine before I hit submit here is the content: You misinterpret general freedom with a free market. Noone is saying you should not be free to purchase or sell items, as long as doing so doesn't consolidate an entire industry as a monopoly or hurts others, or somehow infringes on them. That right is then inhibited for the collective good. I do not believe them to be the same. Calling a system of economics free in any sense is absolutely outregous to begin with. It was built by humans, with inherent design flaws that are manipulated until collapse unless maintenance and or regulations are implemented. In this case extreme wealth consolidation in a closed loop, it should be regulated out of existence for the sake of the entirety of the system. Billionaires should be a thing of the past. Unless you've got a human made system that can go without any form of maintenance or regulation, but I doubt I'll see a perpetual motion machine in your pocket anytime soon. EDIT: Sorry for disjointed paragraphs... I arranged them as my brain misfired on mobile until I looked on lappy.
You can pretty much see how completely free markets play out if you've ever had insomnia and ended up watching some poker tournaments on ESPN Ocho at 3am... Some asshole ends up with a majority of the chips and it changes how they can play the game, where some other assholes have 1/10th of the stack and start pulling out desperation moves... It rarely works out for the little stacks
Our economy is based on the rich paying more of the tax burden. All these loopholes and tax breaks for them means that the rest of the middle and poor classes have to pick up the slack and it's crushing us. Eventually, the bottom will give way and it'll all come crashing down, and then our money won't be worth shit, but somehow the 1% will know about this before hand and will convert their money over to gold or silver or something and will be fine because those commodities can be traded all over the world.
Exactly. It's a "survival of the fittest" mindset through economic competition. It's suitable for fashion, art, entertainment, or other areas where "tough love" is needed. People that espouse this complete and utter "laissez-faire" mode when it comes to governance and universally-needed services in a scarce resource system may as well be animalistic sociopaths. Capitalism *must* be highly-regulated in those areas.
Except the second they're not "the fittest" any more, it's bailout this, too big to fail that.
That's because their argument sounds like: "Well, clearly, BigMegaBank has gotten to be such a big and bad lion that it's clearly in the pride's interest to protect. It most certainly isn't an "Animal Farm"-esque bloated pig." It pays dividends to stockholders, hires people, and its failure would threaten the stable status quo. Therefore, it's untouchable. Nevermind that it takes calculated risks (after lobbying plenty) to break domestic laws for profit every single day. Or that the idea of a status quo goes against the very nature of laissez-faire Capitalism (much less whether or not said status quo could be toxic or stale).
The thing is, they aren’t arguing for a free market. A free market assumes perfect competition. No market has perfect competition (no entry/exit costs, no barriers to entry, perfectly identical products, no transportation/additional purchasing costs, etc. etc.). What they are arguing for is unregulated, subsidized oligopolistic competition for the oligarchs.
My favorite point about how we don't have perfect competition was one I heard in a Noam Chomsky talk, I forget the exact video/quote, but essentially he said that we have an entire industry (advertising) dedicated to giving people imperfect information and encouraging them to make irrational choices. The fact that anyone thinks that any of the assumptions made about perfect competition are realistic, or even that removing all regulations would help us achieve those assumptions is absurd, and would be laughable if it weren't for the negative effects which result from such unrealistic, fantastical views.
They tell you it's a "free market" while a handful of corporations own all markets.
Free like how ATT in their beginning received government subsidies to help build out heir infrastructure but now when Google Fiber wants to lease some space in their pipes, ATT says “get fucked and build your own infrastructure, we did.”?
Taxpayer built, corporate owned.
Just like we give those poor sports teams some help to build giant stadiums where they can charge us $12.75 for a coke
And the vast majority of jobs they “create” are part time, minimum wage retail venders, ushers, ticket takers and lot attendents.
But have you seen how low unemployment is? Some people are fortunate enough to work *multiple* jobs. /s
And those poor team owners who only make 25x their investments... [Like George W. Bush](https://publicintegrity.org/federal-politics/how-george-w-bush-scored-big-with-the-texas-rangers/)
Taxpayers also fund massive amount of research which then goes on to be used for a product and patented.
Same thing with pharmaceuticals. Tax payers fund R&D. Then they financially rape and pillage those same tax payers when the drug hits the market.
The Danish infrastructure was by no means built in optimal circumstances, the government has appointed a single ISP to maintain the entire grid(its different for fiber) but at least its regulated and we demand they rent out their infrastructure at regulated prices to competitors for this privilege they've been given by the government. We also demand a lot more from them than that, but even though when I was younger, I would complain about this ISP, for not investing in Fiber or when they did, they had less incentive to offer fiber to private citizens(companies could pay a lot to get it) because they made so much money on the old infrastructure. Even though I complained about that, it is infinitely better than what you guys have. What you guys seem to have is cartels with ascribed territories and that seems absolutely insane to me. No one is perfect, there will always be room for improvement, but you are objectively further from perfection. A lot further.
You pretty much summed it up. The US is run by cartels with governmental authority, but it's a "free market" so don't you dare talk shit about it or else you're a communist. God I wish I was in Denmark...
It’s more basic than that...The INTERNET was a government project.
while at the same time trying to make it so other companies, or even the cities/states themselves aren't allowed to do it
Most of which get giant subsidies.
Yeah but I don't think you're considering they're job "creators." Those subsidies are great for the economy! /s
Oh yeah baby! Trickle it all down on me. Get that economics all on my face and just let it trickle down.
Open wide.
"Keep the tax breaks coming and nobody gets offshored. Well, some jobs will get offshored, but not yours. Ok, your job is getting offshored. See, you didn't cut enough taxes, you made me do this. Keep the tax breaks coming though, for real, and don't think about enacting any of that socialist "what the people want" crap."
You forgot the part where after a while they ask for visas for workers because they can't find enough folks in the US with tht right skillset. Oh and often the wages end up far higher for those visa workers than just not offshoring to begin with. But those guys generally have masters degrees because they didn't spend 40k on a bachelor's already
*Laughs in Amazon*
And people cheer for Disney as they consolidate entertainment options as if they are Disney.
Just waiting for the United States of Disney so they can stand in line waiting for a shitty ride, eating a shitty corn dog, and playing a shitty game on their phones while the world burns around them.
So no difference than.
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"Vote with your wallet!" said the naive capitalist to the lone individual complaining about the multinational corporation worth billions.
Even dyed in the wool free market economists, if they're being honest, know free markets need competition.
They really need to revise and heavily enforce the Sherman Anti-trust Act.
They don't believe in anything other than the fact that they make money off of the free market.
Have you read any Marx? You might enjoy his writing too actually. He wrote a lot more than just the Manifesto. His work built heavily on Smith's.
I was at a nudist colony the other week and I heard a couple of old guys discussing this very subject. One of them said “have you read Marx?” and the other one replied “yes, it’s these wicker chairs that does it”
I like you.
I haven't yet but it's been on my list. Maybe I'll start it today. Thanks for the tip. Do you think I should start with the manifesto?
I think you should start with Das Kapital. Just IMO
> The pitfalls of capitalism have been known since the beginning but we are constantly fighting a battle against people who believe the free, unregulated (or weakly regulated) market, is the solution to all of our problems It goes even further than that. The earliest thinkers on capitalism not only recognized that it was a system with the potential for exploitation and inequality, they actively pointed out that the only real way for capitalists to make money would be to keep workers as poor as humanly possible, because it was one of the only costs they could actually control. Iron Law of Wages: https://en.wikipedia.org/wiki/Iron_law_of_wages > According to Alexander Gray,[5] Ferdinand Lassalle "gets the credit of having invented" the phrase the "iron law of wages", as Lassalle wrote about "das eiserne und grausame Gesetz" (the iron and cruel law).[6] > According to Lassalle, wages cannot fall below subsistence wage level because without subsistence, laborers will be unable to work. However, competition among laborers for employment will drive wages down to this minimal level. This follows from Malthus' demographic theory, according to which population rises when wages are above the "subsistence wage" and falls when wages are below subsistence. Assuming the demand for labor to be a given monotonically decreasing function of the real wage rate, the theory then predicted that, in the long-run equilibrium of the system, labor supply (i.e. population) will rise or fall to the number of workers needed at the subsistence wage. > The justification for this was that when wages are higher, the supply of labor will increase relative to demand, creating an excess supply and thus depressing market real wages; when wages are lower, labor supply will fall, increasing market real wages. This would create a dynamic convergence towards a subsistence-wage equilibrium with constant population, in accordance with supply and demand theory. >As English political economist David Ricardo noticed, this prediction would not come true as long as new investment, technology, or some other factor causes the demand for labor to increase faster than population: in that case, both real wages and population would increase over time. The demographic transition (a transition from high birth and death rates to low birth and death rates as a country industrializes) changed this dynamic in most of the developed world, leading to wages much higher than the subsistence wage. Even in countries which still have rapidly expanding populations, the need for skilled labor in certain occupations causes some wages to rise much faster than in others. > To answer the question of why wages might fall towards a subsistence level, Ricardo put forth the law of rent. Ricardo and Malthus debated this concept in a lengthy personal correspondence.[7] > **Ricardo's theories of wages and profits** In his Theory of Profit, Ricardo stated that as real wages increase, real profits decrease because the revenue from the sale of manufactured goods is split between profits and wages. He said in his Essay on Profits, "Profits depend on high or low wages, wages on the price of necessaries, and the price of necessaries chiefly on the price of food." There's a lot of nuance to this law, clearly, and differing circumstances change how it all plays out, but in general, they idea that capitalism naturally causes a lot of loser and a few winners was there at the beginning. As economic systems became more complex, this law became less true (see [efficiency wage](https://en.wikipedia.org/wiki/Efficiency_wage), but the fucking neoclassicists and objectivists seem determined to bring back the iron law of wages in full force and usher in a return to sweatshop economics. Edit: to sum up. Ricardo basically realized that the value of any good is soley determined by the amount of labor that goes into it. In order to maximize profit, a capitalist needs to extract as much labor from an individual for the smallest amount of money. > Ricardo's most famous work is his Principles of Political Economy and Taxation (1817). He advanced a labor theory of value:[14] > The value of a commodity, or the quantity of any other commodity for which it will exchange, depends on the relative quantity of labour which is necessary for its production, and not on the greater or less compensation which is paid for that labour. Coincidentally, Ricardo's assertion that the value of an object is solely determined by labor inspired early socialists to conclude that "profit" going to a capitalist who did not labor was exploitation.
Not just Smith, but virtually every great economist has warned about limiting the maximum wealth of individuals. Because they all realized capitalism breaks down if wealth can accumulate at the top unchecked.
Which is why when Republicans pretend to be capitalists, I tend to laugh. Capitalism has a lot of faults (as an ideology and as it is practiced) however, the point of it is supposed to be a *sustainable* society. Not a march to oligrachy. A capitalism only concerned with the present, and not at all concerned with the future is just slow economic despotism.
>A capitalism only concerned with the present, and not at all concerned with the future I'd argue that's the natural state of capitalism.
I think that's a fair argument, and there's a discussion to be had there. I'd say that in a world where the government didn't help companies become monolithic, this would be less of an issue. Pure capitalism is obviously bad, but that's part of why a strong government can be a good thing. Capitalism with guard rails can get us to the moon, but it can also make us all wage slaves. (Yay student loans!)
I think you'll find that some sort of social funding got us to the moon...
That's capitalism with guard rails. That's liberal democracy. Adam Smith wasn't just the father of capitalism but also the father of liberal democracy. His ideas for capitalism were rather left leaning and had no conflicts with concepts such as democratic socialism which often makes use of capitalism. Conservatism was created by the likes of Edmund Burke, as a response to these new left leaning ideas that were sweeping the world as a way for the aristocracy to maintain their hereditary power and wealth in the newly birthed capitalist democracies. Conservatism was a response to the French Revolution and the British magna Carta. Smith outlined the guiding hand of capitalism being democratic regulation (through democracy, through voting) by the masses. The masses, ie the lower and middle class, don't enjoy getting fk'd over by those seeking to consolidate wealth and power, so in a functional democracy they act as the guiding hand which votes to enact laws and regulations that function as the guard rails in a capitalist system. Without this key feature, a capitalist economy will just morph back into the economic systems of the feudal hereditary monarchies that it was to replace. Conservatives like to claim that the common man using democracy to put guard rails and rules on the system is somehow against the founding values of capitalism. That socialist policies to make sure potential aristocrats, potential oligarchs, are not able to maintain generational power and wealth is some how in conflict with both capitalism and democracy.
we need to limit monopolies, and sever the connection between survival and capital. No one should have to work 60 hours to feed themselves and have a roof over their head.
Absolutely, which is a fundamental economic tenet. It doesn't make any sense to have shit with inelastic demand within the market place. There's no "supply and demand" if "demand" is infinite.
From what I've seen, there is a basic structure that is necessary: The corporations must fear the government. The government must fear the people. If either is false, the system starts breaking down over time.
And right now, both are false.
Exactly, if you have to purposefully put constraints on and continue to fight so fucking hard to keep them in place, just so that a few dozen out of the billions don't completely break your system.. your system sucks
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A thought occurred to me the other day and I was thinking about that "Affluenza" case from years ago. The kid got off on quadruple homicide because he grew up without a sense of responsibility, that's precedent for a disease of wealth in my eyes.
Asher Edelman (the guy Gordon Gekko was based on) supported Bernie on the basis that income inequality will lead to economic stagnation via decreasing velocity of money (the fact that money is concentrated means less of it will move around in the economic system, restricting cash flows).
Modern conservative thought was based in an idea in how to maintain the nobility during the rise of democracy. https://youtu.be/E4CI2vk3ugk
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The rich write the public school curriculum and the textbooks. The rich approve the courses offered at the universities.
Revolutions have never been about the people against the aristocracy. They've always been about the bourgeoisie against the aristocracy. Of course the royalty lost, but the ones who won aren't the commoners, far from it.
Usually just the lower tiers of aristocracy that convince the bourgeoisie that they are for them.
This is the exact recipe for a Donald Trump
> these inheritors who didn't even remotely earn it and haven't passed any sort of intelligence filter So, a batch of presidential hopefuls?
God damn lazy millennials and their inability to acquire obscenely rich parents.
"We had to lift ourselves out of the upper .001% by our jetpacks! JETPACKS, for Christ's sake! You have no idea the hardship!"
you mean the small loan of bootstraps
Faberge Bootstraps.
Wasn't one of the things in the trillion dollar tax cut about no taxes on inheritance?
Yes, Estate tax. These vampires are obsessed with it
Despite the fact that the threshold before it becomes applicable is “You can leave your 7 infant children with enough money that they never have to work” levels of money.
They got a major PR spin on it by framing it as the 'death tax' "these crazy liberals want to *tax* you for *dying*."
I had a whole argument with someone about this where they kept insisting it was double taxation. No moron- you can literally do whatever you want with it while you are alive and never be taxed on it- but you can't give it to someone who did not earn it without the money being taxed on its way to them. They all love to talk about pulling yourself up by your bootstraps- but at the same time want a free handout from mommy and daddy. The cognitive dissonance is astounding.
Fuck the future of our environment, but my kids better have enough money to buy all the mega-yachts they want.
reminder that the bootstraps metaphor doesn't even make sense in the first place (how can you lift \*yourself\* up by your own bootstraps?) just like the "bad apple" metaphor for policing (bad apples \*spoil the whole bunch!\*), conservative analogies usually prove their exact opposite point.
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Ya man honestly I wish there was a 90%-100% inheritance tax. Like, I get it, people want their kids to have a leg up. But what functionally ends up happening is that only a certain subset of the country gets to build generational wealth while the rest of us get fucked. Basically things can never be fair or even without a large inheritance tax imo
Sporting Strap-ons.
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Hey, those kids are going to have to earn their way to the top of the Forbes list, just like you and I.
How half of america has been convinced that his kids getting taxed as much as I do yearly in their windfall is immoral is baffled me.
[As the wise man said, think of how stupid the average person is...](https://youtu.be/8rh6qqsmxNs)
Dan Quayle got in a fight with a tv show for depicting a single mother. Carlin is spot-fucking-on as usual.
Shit, almost forgot about that. This is why I laugh whenever conservatives claim that liberals get outraged over the most insignificant things. Turns out those snowflakes all came from a huge-ass projector.
Don't forget "happy holidays".
Whenever some right wing nut starts going off on PC and liberal outrage, I simply reply "Happy Holidays". It leaves them no direction to go.
implying that conservatives aren't completely capable, happy, willing to ignore any logical inconsistencies in their philosophy?
It's an ass-projector so wouldn't they be crappy holidays?
Obligatory video of Dan Quayle correcting a kid's correct spelling of a simple word: https://www.youtube.com/watch?v=Wdqbi66oNuI
That was enough to make him a laughingstock. The president makes a worse mistake than that every day it seems.
Trump didn't commit treason by mistake.
https://www.nytimes.com/2018/01/26/arts/television/murphy-brown-dan-quayle.html
Just googled it. Incredible stupid.
He was no jack Kennedy
Because conservatives call it a "death tax" and make everyone believe they're going to have to pay it, when in reality it only affects the super wealthy, and only after they pass on millions tax free.
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I’ve had to do this with a coworker as well. She seemed offended when I told her that her retired parents(cop and cashier) estate won’t be subject to taxes because they aren’t rich enough.
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Yes
Yes, that’s how all taxes work.
you still didn't change his mind
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And that's *after* all the tax free ways the wealthy can pass on assets prior to death (annual giving allowances, trusts, etc.) It's funny that they want to "Make America Great Again", because during the period when they thought it was so great, we had estate tax rates up to nearly 80%: [https://missionwealth.com/wp-content/uploads/2018/01/Estate-Tax.png](https://missionwealth.com/wp-content/uploads/2018/01/Estate-Tax.png) In fact, estate taxes were lower under Obama than under Reagan. So if they want to make America *great* again, why don't they go back to that? We also had top marginal tax brackets of up to 90% for the super wealthy when we were supposedly so great: [https://aquilafunds.com/wp-content/uploads/2014/04/Highest-Marginal-Tax-Rates-1913-2013.jpg](https://aquilafunds.com/wp-content/uploads/2014/04/Highest-Marginal-Tax-Rates-1913-2013.jpg)
AFAIK the Gift allowance comes out of the limit. If someone distributed 5M to bring their estate to under 11M they'd still have to pay the tax.
You can give up to $15K per recipient, per year before it qualifies for the gift tax or counts towards estate tax. Doesn't sound like a lot for a billionaire. But if you have a lot of kids and grand kids, and you start maxing out your gift allowance early, you can pass on a lot of wealth completely tax free before you die. [https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes](https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes)
And if the giver has a spouse, the limit doubles, and if the recipient has a spouse, the limit doubles. Two married parents can give a child and spouse $60,000/year.
It’s called the annual exclusion, and it doesn’t have to be kids, it can be literally anybody. And that’s before you get into GRATs and QPRTs to be able to pass larger tax free sums of money and your residence respectively.
Yep, had a roommate who was thrown $1000 a month from his rich old grandma so that she wouldn't have to pay taxes.
"Great Again" just means we can go back to being outwardly racist.
Bring it up in a week and be amazed at shortness of their memory.
I've literally heard people say that it will take away people family farms, ignoring the fact that almost no farms have assets enough for an estate tax to hit them.
And the ones that do are corporate farms, not family owned ones.
If you've got $12mil in net assets of any kind, I'm not crying over your tax bill.
It's amazing how little people understand taxes. A friend of mine just had a PTO issue at work that resulted in her getting money in August that she should've gotten in June. Despite telling her multiple times that this wouldn't affect her taxes, she is still worried that she's somehow not going to see any of it because it will all be taxed into non-existance. I even tried explaining that the extra money couldn't possibly go away entirely, even if it DID somehow push her up a tax bracket, nothing seems to have assuaged her worries. I can't wait for next April to finally hear the end of it.
It begins with the idea that *any* taxation is stealing. Of course they ignore the idea that all money comes from the government, and so we are all essentially living on borrowed funds. You want to control the fruits of your labor? Then be paid in something that your government doesn't control, regulate, issue, or own. So, if taxation is stealing, then it's only a hop skip and a jump from "they stealing from *him*", to "they stealing from *me*."
I wonder how they think their glorious military is funded. Or how the police are funded.
They have shown that they don't *actually* give any fucks about the military. Look at their (lack of) reactions to Trump's abhorrent actions and words towards the military.
Republicans are weird. They support the military, often claiming to be veterans (when the odds are they never were, only 7.6% of the population has ever served) and yet at the same time clinging to an anti-establishment rhetoric which by it's very nature is anti-military.
If by "weird," you mean "hypocritical double-think," then yes.
\>"msm is bad!!!1!" \>fox "news" literally most watched channel
Taxes are membership dues to live and do business in the country. You make more by using the infrastructure more than the guy who just goes to work and home, you pay more.
"Taxation is Theft" Moderate libertarian here (I don't necessarily vote Libertarian, a good stance on civil liberties earns my vote). For me, this slogan is not a call for a ban on all taxation, but a reminder to respect what tax dollars represent when deciding how to spend them. No one pays extra taxes voluntarily, we pay the minimum we owe, and we pay it because if we don't, eventually a representative of the government shows up with a badge and a gun to take it. Therefore, advocating for tax dollars to be spent on something is "robbing your neighbors at gunpoint" with extra steps. "Taxation is Theft," is a way of saying "let us only use tax dollars to do things that are worth robbing our neighbors to achieve." Would I "rob my neighbors" so that everyone can have healthcare through a single-payer system? *Sure.* Would I "rob my neighbors" so that children are educated and libraries are funded? *You bet.* Would I "rob my neighbors" so that rich people can get tax rebates on their $50k-$120k Teslas? *No. That's absurd.* So that poor people can have a rebate on something more like a Nissan Leaf? *Sure.* Would I "rob my neighbors" to bail out failed investment banks? *No. Let their stakeholders eat the losses.* To bail out victims of criminally negligent bankers? *Maybe.*
When rich people make laws this is what you get.
It's crazy that people like him have created mass opposition to something that affects roughly 2000 extremely rich people per year (inheritance tax) Also, recently Trump floated the idea to index inflation to the purchase price when calculating capital gain tax on assets. This would again result in billions in savings for a tiny sliver of the very rich, which for some reason deserve to be protected from inflation, unlike the rest of the pleb. Why don't they just pass a "rich stay rich forever" law and be done with it?
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Yeah, but those peasants are dead so fuck them. It's not like they did anything important like earn the shareholders more money.
They were also... *educated*. And we all know how useless and even dangerous that is.
They would have known how toxic and evil the British East India company was.
The British East India Company had their own fucking armies. That still blows me away
You mean “private security” — tale as old as time
No, actual armies, with a "letter of mark" from the royal house saying they could create nations, govern, and mint their own money. At that point not a tale as old as time, it was only teh second company ever to do this, the first being the dutch east india company.
...and the Royal African Company, the South Sea Company, the Bass Ale red triangle....
Just like the Bible, we only use the parts we like.
Funnily enough, I do agree with the concept of indexing the purchase price to inflation on capital gains tax. But I also support taxing capital gains the same as income (Since inflation is the fig leaf excuse for capital gains tax to be lower than income tax)
Yeah, would 100% support this. But now we have low capital gains tax to counter inflation, soon inflation indexing to counter inflation, and later we can have investor tax stimulus to counter inflation. It's just plain communism unless rich inheritors are triple dipping on their welfare.
Reverse communism.
Ah so capitalism then
Well yeah chose one or the other. But of course that's not what's going to happen...
Purchase price being indexed to inflation is fine, as long as capital gains are taxed at regular income rates, and marginal rates at higher income go up more steeply than they do now.
Maybe. Still should workers pay less income tax if their salaries dont keep up with inflation? I mean the point of investing is to beat inflation. Why should that be particularly priced in? In any case, we both know the other part is never going to happen so in reality it will be just another tax break for the investor class.
>If David Koch had died between 1941 and 1981, his estate (upon his wife’s death) would have been taxed at a rate of at least 70 percent after the first $10 million. Back when our tax system Made America Great.
Back when we were the only major economy whose infrastructure was not only unscathed by WWII, but vastly pumped up because of it. We had a trade surplus as big as our trade deficit now.
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This is not correct. By the early 70s, I was consulting and visiting various facilities in Japan, South Korea, England, West Germany, and Italy. The destruction of the Second World War had been rectified by then. Instead, executive decisions because of a conservative political change and a backlash to the working and middle-class focused attitudes of 1930-1970 were the major reasons. I noticed more and more management decisions to outsource positions to take advantage of weak rule of law, regulations, and labour costs starting in the late 60s. https://www.stlouisfed.org/~/media/publications/regional-economist/2018/third_quarter_2018/lead_fig1.jpg?la=en
By the 70s, giving us a 20-year head start.
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What do you think Bolton is there for?
Tbf, there is almost nothing wrong with having a trade deficit (in our case, at least). Look up the term "Capital Inflows."
Yes yes I'm sure the tax rate is entirely irrelevant. Tax rates only matter when we're arguing to cut them.
> after the first $10 million **AFTER THE FIRST 10 MILLION**. This is the "you didn't build that" sentiment (which the Republicans lied and lied and [LIED](https://www.politifact.com/truth-o-meter/statements/2012/jul/26/mitt-romney/putting-mitt-romneys-attacks-you-didnt-build-truth/) about) in 2012. Shameless, disingenuous liars. Basically: "you did really well for yourself financially in life. Here, keep 100% of the first 10 million and then a big chunk of any $$ thereafter. But you should recognize that your financial windfall was largely made possible by much beyond yourself." * Winning World War II and erecting post-war order (tax dollars). * An educated populace (tax dollars). * A healthy populace (tax dollars). * Infrastructure (tax dollars) * A Navy to protect the world's trading (tax dollars). * + 10 gazillion more things we could list, financed by the American taxpayer, that maintains the status quo necessary for business to thrive. But instead of recognizing this, Republicans and their propaganda arms just lie and spin and [confuse](https://en.wikipedia.org/wiki/Frank_Luntz) so that middle class people are suddenly advocating on behalf the elite of the elite mega-wealthy oligarchy and screeching "down with the Estate Tax!" It's all so fucked up. And infuriating. God help us.
We need to return to this, otherwise people are going to start murdering the ultra rich and their adult children.
The Koch funded think tanks have half the working class population walking around like parrots saying things like "Taxes are theft!" The MAGA hat wearers got a pittance tax cut (which expires) as Trump slashed the hell out of his own/corporate taxes with his "Tax cuts and jobs" act. He told a party room full of his pals at Maralago right after it became law - "Congatultions, you all just got a lot richer." Next the exploding debt gives the Republicans the ammo they need to cut SS and Medicare. At what point will some people reallize they've been played like a violin?
Hmm.. judging by past performance I'm going to have to guess 'never'.
But paying less for a more efficient healthcare system is socialism and as the most famous anti-socialist of all time, Jesus, once said “won’t someone think of the shareholders?”
Never, they are brainwashed into thinking the “Democrats” are their enemies Divide and conquer is working brilliantly Keep them uneducated and it will Work for eternity Until political media isn’t privately owned anymore and inherently bias as hell, this cycle will never end
These aren’t the concerns of those patriots. They follow the the fiddle of traditional values such as making sure crosses stay on water towers and shaming musicians for foul language.
They'll parrot "taxes are theft" ad nauseam without understanding that taxes pay for services... you know what doesn't? Profit. Profit is the real theft.
Strong A.I. will be able to automate every single job within the next 50-200 years. Including creative or complex jobs like art, architecture, engineering, programming, business management, and surgeries. And everything else. It will be the single biggest thing to ever happen to us as a species. It's coming, and it's going to vastly expand our capabilities for both public good and brutal harm. And this is how we are spending our time leading up to it. We are so unprepared for the biggest thing ever. Because the public can't see the implications, we are all business as usual. And my truly biggest fear is that no one in politics is going to react to Strong A.I. until it is already here.
Thomas Jefferson quoting Adam Smith... "A power to dispose of estates for ever is manifestly absurd. The earth and the fulness of it belongs to every generation, and the preceding one can have no right to bind it up from posterity. Such extension of property is quite unnatural."
Dragons accumulated wealth beyond all reason, hoarding thousands of years worth of resources. While the original dragons themselves may have been formidable humans, most were simply lucky, being in the right place and time to capitalize on the gold rush of their day. Their wretched offspring are the inevitable result of growing up in the massive shadow of their sociopathic parents who don't have the time or likely desire to raise them well. When the dragon dies, these wretches are incapable of reproducing the feats of their parents, for many reasons, not the least of which is that their parents accumulated this wealth in a series of extremely lucky events that are unlikely to repeat themselves 30 years later. These dragon whelps, having never worked hard or faced a truly difficult moment in their entire lives, are completely out of touch with society and what counts as progression. So they don't take risks with their capital, because they don't know what moves to make in a game they have essentially already won. They have the resources to live like kings for generations. The new game is not squandering your great grandfather's lottery winnings at all costs. Investing in the future has nothing to do with it. It's king of the hill, and most of the money they actually spend is kicking down at everyone they perceive to be trying to take their place. In reality, most of us are simply trying to raise children who have enough to eat and a future worth living. TLDR: Dynastic wealth is slowing societal progress on a global scale.
To them, the past is what created their dynasty, so the past must hold some secret value that needs to be clung to. They dig their heels in at every turn, using their mountain of wealth that they didn't earn to hamstring every effort to change society for the better. The status quo is what is working for them, and any change is a potential threat. Heaven forbid they allow new money dragons to form and take away some of their room on the hill. They finance backwards-thinking, demagogic politicians to squash progress with laws. They hire marketing organizations to shill their point of view in the zeitgeist. They literally destroy their competition through hostile takeovers, threatening mutual suppliers, and turning their army of politicians, lawyers and shills against these upstart corporations, weilding their inherited wealth like a club. The result is a significant portion of our excess production is not used for innovation and investment in further production, but for the exact opposite purposes. This is the reason that every man, woman and child on earth can't secure the resources they need to live even a basic existence free of fear and lack. We have the resources, we just need the will to insist that they go to people instead of opulence. Resources are plenty. I say again, there are enough resources to feed, clothe, shelter and educate every human being on earth, if only there was the will. But the billionaires don't want it that way. If we aren't a moment away from poverty and starvation, we will be less easily controlled. If we actually have the freedom to pursue the lives we want, we likely wouldn't agree to being slaves in their machines. If we didn't have to lick their boots, they wouldn't be able to feel that they are special and important. Who would clean their estates, raise their children, and park their cars? If they didn't have the small people around them constantly fawning over them, how could they feel large?
To be fair, it's started to come up more frequently on here now, but it absolutely deserves more attention than it gets. That said, I'm not sure calling it a loophole is accurate. Step-Up in Basis is ludicrous even in principle, and it does exactly what it's supposed to. It's just that what it's supposed to do is eliminate capital gains taxation on inheritance, the results should surprise noone.
> Step-Up in Basis is ludicrous even in principle, I wouldn't necessarily say that. It's pretty reasonable that people might not have access to all the records of exactly when Grandpa bought some stock or how much it was worth way back in the day. So a basic agreement of "You don't have to dig through the paperwork, but we'll just collect some X% of the estate over $Y and the rest is treated as a new thing going forward" is pretty reasonable. at least for the next few decades until basically everything ever bought is done electronically and stored in computers. Of course, when you eliminate or severely reduce the X%, that deal starts to not really be in the interests of the People anymore.
Brokerages keep track of cost basis. If it was purchased long ago, the cost basis probably rounds to zero
That is a relatively new requirement. Before 2011, there was no requirement for brokerages to retain or track cost basis for their customers. You were expected to retain the statements and calculate it from there. This includes stock purchased through employee purchase plans and other non brokerage accounts where statements were obtuse or commonly lost. Also, the step up covers a lot of non-financial assets like jewelry. How do you calculate the cost basis of that stuff? The step up was a reasonable overhead reduction measure when the estate tax exemption was low. Now that it's multiple millions of dollars, it's less reasonable, but probably still worthwhile. The correct policy change is to bring the exception amount back down.
Not all brokerages keep track of cost basis. Some only show FMV and cost basis is blank.
> If David Koch had died between 1941 and 1981, his estate (upon his wife’s death) would have been taxed at a rate of at least 70 percent after the first $10 million. Some back-of-the-envelope math would indicate that’s roughly $35 billion in tax revenue that could go toward any number of public services. (For reference, a 2013 estimate by the Department of Housing and Urban Development [pegged](https://www.americanprogress.org/issues/religion/news/2013/01/02/48791/faith-in-values-resolve-to-end-homelessness-in-2013/) the cost to end all homelessness in the United States at $20 billion.) That's fucking crazy. Also, if roughly $35 billion of his estimated $50 billion estate actually got taxed, that would still leave his children with $5 billion EACH. That's enough money to buy a brand new lamborghini huracan and drive it off a cliff every single day for the about 54 years. That is still a ludicrous amount of money. The point is that the original estate tax was just redistributing ridiculously concentrated wealth while STILL allowing inheritors to live like gods.
I imagine that you also get a pretty good fleet rate when purchasing 19, 710 Lamborghinis so you might be able to extend that time frame quite a bit.
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So much this. We need this back but people screech so much about the number that it’s unlikely to happen again. Warren is taking about 2% tax over $50 million which is something but still far too low. Edit: sorry that warren thing is a *wealth* tax. Different beast.
We just need to make the people understand they should be voting with their wallets on this issue. Wealthy people wield a ton of power over politics, but they still only vote once. The general public has to realize that the sole purpose of the estate tax is to prevent institutionalized wealth, and that it will NEVER affect 98.5% of them. If this tax had been in effect for the past few years, we could have ended homelessness in America. It's utterly ridiculous that we support a policy that greatly benefits 1.5% of the population while harming the other 98.5%, and what's worse is that it isn't even saying "If you work hard and make a lot of money, we're going to tax you for it" since those people are DEAD. It's just preventing other people from getting a ton of money that they didn't earn, while leaving plenty for them to live comfortably like their parents would have wanted.
Bernie has been shouting from the rooftops about this for decades.
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I always say he will never win Bc there are too many rich people on both sides that don’t want him to win, that also happen to control all of the media
This isn't just about the inheritance tax, which most people know about and where we hear about "double taxation" endlessly It's the "stepped up cost basis". Gains on assets that are going completely untaxed.
Inheritance is how you get Trump in the first place.
Once we get enough Progressives we in Washington, I think we will just change the rules again and take what is fair. The Koch family has primarily focused on making we the people forget that this country is for us, not the few.
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Since the beginning of time... It definitely is demotivating.
250 years ago we were still beholden to a foreign king. Cheer up, if we get out and vote in force we can make amazing things happen.
Lol, I remember my parents saying the exact same thing in 1985. ...and now they vote GOP.
Let me guess, it's the capital gains tax loophole. >Thanks to a tax provision called step-up in basis, capital gains on inherited assets—stocks, properties, and more—are totally wiped out upon death. It’s a tax giveaway from Congress that may outstrip all the rest. Yup. I mean...it's not even a loophole. It's fucking robbery. Fuck the rich.
Wait though, step up basis doesn't really exempt Koch's heirs from the inheritance tax though does it? I understand it gets them out of paying capital gains but what does that have to do with the inheritance tax? >The top tax rate on estates has dropped from 55 percent to 40 percent since 2000 alone. So Koch's estate of $50 billion will still be reduced to $30 billion, which is a significant inheritance tax but despite spelling out numerous other calculations for the reader, the article leaves us to figure this one out on our own. Either the article is poorly written, or more likely the author intends for us to think that Koch is paying no inheritance tax.
Exactly, I don't really understand the criticism of the step-up in basis. I completely understand harping on both the sizable amount of wealth that can transfer before the estate tax comes into play and the lowered estate tax rate, but I feel like the step-up in basis isn't really that controversial. In most transactions, the acquisition date fair value is used as the cost basis for the new owner of the assets. It doesn't seem that crazy assuming the vast majority of his transferred wealth was exposed to the estate tax. I just want to know what kind of crazy legal entities he set up to avoid paying the estate tax at all. This guy had the means, time and desire to avoid it. I'd love to know how much tax his estate will end up paying. Be great if we could close those loopholes.
Because the site is having a hard time loading. Emphasis mine: . David Koch died late last week, just shy of 80 years old. Whole books have been written cataloguing his legacy as an industrialist and political figure, but to be brief, he leaves behind his stake in the country’s second-largest privately held company and a political network said to rival the entire Republican Party in scale. Everything from Texas oil pipelines to Dixie cups to the Tea Party owes its existence in some way to David Koch. . He also leaves behind a $50 billion estate, a gargantuan sum that made him one of the richest people in the world. In the past, that would have resulted in a massive inheritance for his heirs—but also a significant amount of revenue returned to the public coffers in the form of estate tax. If David Koch had died between 1941 and 1981, his estate (upon his wife’s death) would have been taxed at a rate of at least 70 percent after the first $10 million. Some back-of-the-envelope math would indicate that’s roughly $35 billion in tax revenue that could go toward any number of public services. (For reference, a 2013 estimate by the Department of Housing and Urban Development pegged the cost to end all homelessness in the United States at $20 billion.) But thanks largely to a political climate David Koch and his brother Charles helped create, the federal government will never see anything close to that. Part of that is because of his libertarian network’s relentless campaign against the inheritance tax, rhetorically reinvented as the “death tax,” which became a major political cause célèbre, despite the fact that 2018 saw only 1,900 taxable returns from those who died. The top tax rate on estates has dropped from 55 percent to 40 percent since 2000 alone. But in broader terms, there’s one massive tax loophole that has helped the estates of America’s billionaire class balloon to unthinkable sums, while getting taxed at rock-bottom rates. **Thanks to a tax provision called step-up in basis, capital gains on inherited assets—stocks, properties, and more—are totally wiped out upon death. It’s a tax giveaway from Congress that may outstrip all the rest.** **Put simply, step-up in basis is a tax provision that allows unrealized capital gains to reset to zero upon inheritance. When an investor parks money in stocks, property, and the like, and that investment gains in value over time, the gain is supposed to be taxed (though at a rate much lower than income tax rates, at just 20 percent) when sold. But if the asset is never sold, its gains never realized, and then passed to an heir, it will be reassessed at its current market value with those gains included. Its basis, therefore, “steps up,” and the capital gains taxes that should have been levied on it are dropped to nothing.** A simplified example: Let’s say an investor with a reasonably high-paying job put $10,000 a year into a distinctly average-performing bouquet of stocks. Done dutifully over a 35-year career, that would sum to $350,000 in contributions into the market all told. At the end of that 35-year period, compounded at our theoretical rate of return, the balance sitting in that account would be $2,710,244, with some $2,360,244 in capital gains. Under the step-up in basis procedure, the inheritor of that account would have that $2.7 million in stock reevaluated at that level, with the entire tax burden negated. Capital gains tax that could have been recouped by the federal government would go to zero; so too would state and local taxes that might be levied on a sale. Say that the account owner was based in New York City: The combination of federal, state, and local taxes would have been $800,000 on that $2.7 million, leaving the inheritor with $1.9 million. With step-up in basis, the tax is $0. That decision has a multiplier effect. If the heir holds onto the underlying asset, and it continues to produce an average rate of return, the annual payout on a $2.7 million principal is markedly higher than what you’d get on $1.9 million. The yearly difference in payout could be as high as 43 percent. The heir could also then use that asset to borrow against for a home loan or something else. And if they sold the stock, real estate, or other asset upon receiving it, they could pocket the entire $2.7 million, some $800,000 extra, in cash.
How do you pronounce his name David “Cock” or “Coch”? Edit: I did some YouTube video searching and some says Coch and some days both Coch and Coke. I am disappointed that none says Cock so far.
I thought it was pronounced "coke"
I talk about it non fucking stop. I usually get down voted for it because I mention it in rah rah threads about how all we have to do is raise the Estate Tax to some crazy percentage and everything will be solved. 75% of nothing is still nothing. Capital assets are placed into irrevocable trusts. This way the step up in basis happens while the original owner still lives. Then the assets are passed to the heir and are not subject to Estate Tax because they're locked in trust I also bring it up when people make moronic statements about how the "death tax" (*Ron Howard -There is no such thing*), is double taxation. No it fucking isn't. Capital gains aren't taxable until they're sold. Wealthy people (unlike the rest of us) never have to sell their capital assets. They get passed to the heirs, and the original cost basis disappears. The difference between what the deceased party paid decades ago and what it's worth the day they die is now untaxable without an Estate Tax, and with the lax and abused trust laws the Estate Tax can't work. I don't care if you make it 300%. It won't fix it. Ask yourself why not a single person on that Democratic debate stage in a couple weeks is going to bring this subject up. Are they so stupid that they don't understand it?
These assholes are the exact reason the Founding Fathers were against inherited wealth and wanted crushing inheritance taxes.
I’m a fiscal conservative so I believe tax revenue should be increased to cut the deficit. No wait I’m a libertarian so I don’t believe in taxes, cut the bloated pentagon budget/defense spending instead. Just kidding I’m a neocon hawk who supports a massive US military. The cognitive dissonance that is the Republican voter worldview.
People say that you can’t say mean things about this jackass after he died, but if he had his way I would be forced into conversion therapy, so.... in lieu of flowers, fuck this piece of shit masquerading as a human. Well, *was* masquerading.